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 In Corbo v. West Side Travel, Paschal Corbo sued West Side Travel for nonpayment of rent and alleged he orally demanded the money from his tenant.
When West Side later failed to file an answer or appear in court in response to Corbo's nonpayment case, a final judgment was entered against the company and it was subsequently evicted.
Soon thereafter, West Side sought to be restored to the space alleging that it had been misnamed in Corbo's papers -- its actual name was West "Street" Travel. The tenant also claimed it owed no money to Corbo and never received any payment requests from him.
When the Richmond County Civil Court denied the tenant's motion, the company appealed to the Appellate Term, Second Department, which found the misidentification "de minimis" and to have caused no confusion "as to the party being sued."
The AT2 also found that Corbo wasn't required to give the tenant notice in writing since the oral demand was a legally permissible alternative. The appellate court also noted any payments the tenant made to the landlord were properly applied to the rent arrears and the tenant failed to pay the balance of monies due.
Finally, restoring the company to its space wouldn't have been appropriate, since it was a "month-to-month" tenant, whose occupancy was terminable at any time by either party, and Corbo had already "served a termination notice on tenant."
Now that's some West Side story!
(Case closed?)
For a copy of the Appellate Term's decision, please use this link: Corbo v. West Side Travel
 Audrey D faced eviction from her apartment for nonpayment of rent and was apparently unable to find alternate housing due to health and financial challenges.
During a hearing to determine whether she needed a guardian, Audrey D requested that her father be appointed, but he acknowledged that he didn’t know how to find adequate housing for his daughter given her limited resources. A representative of the Selfhelp Community Services, Inc. (SCSI), on the other hand, contended that it could assist Audrey D. After it was determined that Audrey D was an incapacitated person, the Kings County Supreme Court appointed SCSI to oversee her personal needs and property management. On appeal, the Appellate Division, Second Department, explained that when selecting a guardian for an incapacitated person, the primary concern is what is in the incapacitated person’s best interests. When an incapacitated person nominates a guardian, the court will usually defer to the incapacitated person’s request unless there is a clear showing that such an appointment would be inappropriate. While a family member’s appointment is preferable, it is within the court’s discretion to select an outsider if the family member is unsuitable. Given a guardianship’s unique responsibilities, the AD2 concluded that appointment of Audrey D’s father would not have been appropriate or in her best interests. So you see, father doesn't always know best. To download a copy of the Appellate Division’s decision, please click on the following link: Matter of Audrey D.
In World Monuments Fund, Inc. v. Ninety-Five Madison Co., Ninety-Five Madison Co. (“NFM”) entered into a lease which provided that "possession of the premises should be given to [World Monuments] upon lease signing, but no later than May 1, 2000, and that rent should commence three months after lease signing, but no later than August 1, 2000.” Of course, the lease was not signed, nor was possession given to World Monuments, by May 1, 2000. When NFM sought to recover the rent arrears, the New York County Supreme Court sided with World Monuments and concluded that the tenant was entitled to a three-month credit. On appeal, the AD1 examined the lease and agreed, noting that NFM had neither billed nor sued World Monuments for the months at issue; inaction which further supported the lower court’s finding that World Monuments was entitled to the concession. How monumental was that? To download a copy of the Appellate Division’s decision, please use this link: World Monuments Fund, Inc. v. Ninety-Five Madison Co.
 In Adelphi Assoc., LLC v. Gardner, since Gardner was incapable of defending himself within the context of a nonpayment case, a guardian ad litem (GAL) was appointed to represent the tenant's interests.
Without ever meeting or consulting with the tenant, the GAL agreed to convert the nonpayment to a holdover proceeding, and consented to the tenant’s eviction. When the tenant later secured counsel and asked the Kings County Civil Court to vacate the agreement and be restored possession, that forum denied the request. On appeal, the Appellate Term, Second Department, sided with the tenant and vacated the agreement since it had been “inadvisedly entered into.” But the restoration request was denied with leave to renew, as the apartment's current occupant had not been joined to the case. Should that occur, the AT2 suggested the use of a “balancing test” to determine who would get to keep the unit -- after weighing such factors as the former tenant's ability to pay his debts and future rent, together with the prejudice or injury the existing occupant would suffer. Wouldn't want to be the judge that has to make that decision. To download a copy of the Appellate Term’s decision, please use this link: Adelphi Assoc., LLC v. Gardner
 In 115 E. 9th St. Retail v. STA Travel, Inc., 115 E. 9th St. Retail filed a nonpayment case against its tenant, STA Travel, Inc. (STAT). At issue was STAT’s failure to pay its real-estate tax escalation and water and sewer charges.
After the New York County Civil Court awarded the landlord $37,545.84 in rent arrears, STAT appealed to the Appellate Term, First Department. The AT1 found that STAT could not challenge the landlord’s real-estate tax escalation, as the tenant had “failed to object to landlord's annual real estate tax escalation statements within 45 days of their issuance” as required by the parties’ lease agreement. As for the payment of the water and sewer charges, STAT did not contest their “reasonableness” or claim they were "inflated." Rather, the tenant argued that since the landlord had not received bills from the City for the water and sewer charges STAT was not required to remit payment. Without a lease provision which supported the tenant’s position, the AT1 was of the opinion that the objection lacked a meritorious basis. And that’s STAT. To download a copy of the Appellate Term’s decision, please use this link: 115 E. 9th St. Retail v. STA Travel, Inc.
 Because New York is such a "great mosaic," you can expect to encounter people from all walks of life with varying degrees of proficiency with the "mother tongue."
Each and every day, attorneys are in litigation with tenants who lack fluency in English. If a summary proceeding, like a nonpayment or holdover proceeding, is started against such a tenant, must the pleadings be translated as an accommodation to the recipient (in order to avoid challenges to the service effort or to the proceeding's maintenance)? According to a Judge of the New York County Civil Court, that question can be answered with a resounding no. In 240 West 37 LLC v. Star NY Fashion, Inc., the commercial tenant allegedly violated the lease's insurance coverage requirements. In an interesting fall-back position, the tenant's counsel challenged the court's jurisdiction on the grounds that the individual who had received the notice of petition and petition (on behalf of the corporate tenant) was not fluent in English and "did not know what was handed to her." Here's how the Judge disposed of that argument: Certain types of notices, and pleadings in consumer collection cases require pleadings to be in English and Spanish [N.Y.C.C.A. § 401 [d]. The Respondent does not cite any law or rule that has the same requirement for Chinese, whether in a plenary or summary proceeding. I have found no such law or rule. As noted in a case from Illinois, discussing the matter of NUEZ V. DIAZ, 101 Misc2d 399, 421 NYS2d 770, "There is a relative dearth of published opinions defining the contours of "suitable discretion," but it is clear that the amount of discretion necessary to satisfy the rule is rather low." [FLOWERS v. KLATICK, Not Reported in F.Supp.2d, 2004 WL 2005814 (N.D.Ill.)] The Respondent has elected to do business in the City of New York, where English is the predominate language. The petition was signed on October 9, 2007, the answer is dated October 18, evincing an almost spontaneous response. Under such circumstances, the Respondent cannot be said to have prejudiced.
As to the dispute's merits, since the court was of the opinion that the tenant had failed to secure the required amount of liability coverage (only $1Mill rather $2Mill was provided to the landlord), and no timely cure of that default was effected, summary judgment was awarded in the owner's favor. Of course, the decision suggests that the outcome "might" have been different had the tenant failed to respond to the pleadings. Interesting, no? (By the way, the tenant should expect the Notice of Eviction to be in English.) To view a copy of the Civil Court's decision, please use this link: 240 West 37 LLC v. Star NY Fashion, Inc.
 Since nonpayments and holdover cases are designed to be resolved expeditiously, it's never a good thing to allow these disputes to languish.
While they can be held in abeyance for a whole host of reasons, once a matter is "marked off," and no longer on the court's calendar, getting it back before a judge can prove to be quite a challenge -- especially when an adversary is resistant and too much time has elapsed. In Grossman v. Homenny, the owners sought to resurrect a holdover proceeding some 22 months after the case had been “marked off.” Not only did the New York County Civil Court deny that request, but it granted the tenants' cross-motion to dismiss the entire case. On appeal, the Appellate Term, First Department, agreed with that outcome, citing the landlords' failure "to demonstrate a meritorious claim, a reasonable excuse for the delay, a lack of intent to abandon the proceeding and an absence of prejudice to the elderly tenants.” Is this a testament to the Homennys' hegemony? 
To view a copy of the Appellate Term’s decision, please use this link: Grossman v. Homenny
 In Clarkstown Housing Associates v. Henderson, Clarkstown Housing commenced a nonpayment proceeding against its tenant, April Henderson. The parties eventually reached an agreement and entered into a stipulation, which stayed the execution of a warrant of eviction so that April could pay the monies due.
When Clarkstown Housing did not receive payment, a warrant of eviction was issued based on an attorney’s affirmation which contended that the terms of the stipulation had been breached. In an unusual turn of events, April’s attorney moved to vacate the warrant, claiming “that [April] had timely paid a portion of the funds into his office’s escrow account, but, through his own omission, these funds had not been transferred to [Clarkstown Housing].” When the Rockland County Justice Court denied her request, April appealed to the Appellate Term, Second Department. In the AT2’s view, the evidence demonstrated that April had all the required funds available and that her attorney had an excuse for failing to transmit the monies to the landlord. As a result, the appellate court was of the opinion that the "inadvertent default" was excusable and should not result in the tenant's eviction. This April wasn't about to get showered on. For a copy of the Appellate Term’s decision, please use this link: Clarkstown Housing Associates v. Henderson
 In BNS Buildings, LLC v. Morgan, Gary Morgan, who had resided in a rent-stabilized apartment for some 28 years, settled a nonpayment case by consenting to a money judgment in the amount of $504 together with a judgment of possession in the event the monies weren’t paid by a date certain.
The agreement required BNS to make certain repairs to the apartment, but a dispute arose regarding those repairs, and a series of court appearances ensued. During that period of time, BNS declined payments made by the Department of Social Services (DSS) on the tenant’s behalf, claiming that the rent then due exceeded what was being tendered. The Kings County Civil Court determined that DSS and Morgan should each “pay a portion of the rent then agreed by the parties to be due, and that the warrant was again to be stayed pending such payment.” When BNS appealed, the Appellate Term, Second Department, was equally sympathetic to Morgan’s predicament. Since Morgan was possibly entitled to an abatement because of violations and other conditions extant, was prepared to pay the amount the court found to be due, and, BNS had refused to accept a check from DSS for the $504, the AT2 found that the lower court properly exercised its discretion staying the execution of the warrant of eviction since the law abhors the forfeiture of “long-standing” regulated tenancies. A lone dissenter concluded that Morgan had failed to substantially comply with the stipulated terms of the parties' settlement and had allowed the case to "deteriorate into a pattern of repeated requests for relief" wherein Morgan violated a number of court orders. By the time DSS stepped into the picture with the $504, additional rent payments had become due and were required to be made. As a result of Morgan's inability or refusal to honor his contractual obligations, the dissenter was of the opinion that “good cause” had not been shown for any additional delay and that by failing to stem this kind of abuse “the majority effectively dissuades landlords from ever entering into a stipulation with a tenant.” Got a dissent to that? 
For a copy of the Appellate Term’s decision, please use this link: BNS Buildings, LLC v. Morgan
 Many landlord-tenant cases never get to the trial stage and are frequently resolved by way of an agreement known as a "stipulation of settlement" or "stip."
Like other contracts, these documents can be the subject of protracted litigation, particularly when errors, omissions, interpretative disputes or other misunderstandings arise. So, while one party may think it's getting a form of closure by signing the document, the other may later feel that the agreement should be rescinded, or not enforced as written, and may ask a judge to restore the litigants to the status quo ante -- the way things were before the stip was signed. While often an effective plot device for works of fiction, judges will typically resist use of this "way-back machine" power, unless extenuating circumstances -- like fraud, collusion or mistake -- are present. If the existence of one or more of those factors can not be demonstrated to a court's satisfaction, the agreement's silence about a right or remedy will likely be perceived as a knowing and intentional relinquishment or "waiver" and a litigant will not be afforded an opportunity to rewrite the deal. By way of example, in Rosewohl Enters., LLC v Gluck, Rosewohl settled a nonpayment case it had brought against its tenant, Jack Gluck, by way of a stipulation of settlement that was "so ordered" by a judge. When Rosewohl later sought to collect the fees it incurred for having to commence the case, both the New York County Civil Court and the Appellate Term, First Department, rebuffed that effort, finding that the stipulation's silence precluded the recoupment of those charges. So, for some, silence is golden. For a copy of the Appellate Term's decision, please use this link: Rosewohl Enters., LLC v Gluck
 As we have previously reported, there continues to be a disturbing resistance by our appellate courts to award legal fees to a prevailing party, even when that reimbursement is clearly authorized by the parties' lease agreement.*
Although we have already expressed our concerns about this phenomenon, we couldn't resist writing about it again, particularly after we came across the Appellate Term's decision in East Midtown Plaza Hous. Co. v. Cannings. In that nonpayment case, after a cooperative was awarded some $4,419.00 in maintenance and additional-rent charges, it also sought to recover some $8,100 in legal fees it had incurred during the litigation's course. While the New York County Civil Court granted the landlord's request for fees, the Appellate Term, First Department, characterized the recovery as "manifestly unfair" and reversed. In this particular case, deficiencies with the building's multiple-dwelling registration (or "MDR") triggered "substantial delay and expense," and prevented the cooperative from quickly pressing its claim to completion. That, according to the AT1, militated against the grant of fees in the landlord's favor. A lone dissenter, Justice William P. McCooe was quite troubled by the request and a bit more vehement in his disapproval of the cooperative's conduct: The landlord transformed what should have been a garden variety summary non-payment proceeding into one requiring motions and a cross motion because of its misstatements as to the status of the building in the petition and the motion papers which misled the motion court to render an erroneous decision and waste judicial resources. A dismissal of the proceeding at that point for failure to file a multiple dwelling registration statement would have resulted in the tenant being the prevailing party ... The claim for attorneys fees is already twice the award and in large measure was caused by the landlord's conduct. The landlord should not be rewarded for its mistakes nor should the tenant be required to pay for them ....
While we understand that the fees associated with correcting the building's MDR status should not have been chargeable to the tenant, it remains unclear why the balance of the costs incurred by the landlord was denied -- and why not even a pro-rated portion of the owner's costs was awardable in this instance. Since the cooperative successfully recouped a money judgment against the tenant, we are of the opinion that a blanket denial of all fees and charges was far from a fair, equitable, or just result. To download a copy of the Appellate Term's decision, please use this link: East Midtown Plaza Hous. Co. v. Cannings -------------------------- *For our other blog posts on the issue, please click on the following link: Attorneys' Fees
 Last week, in Rosario v. Diagonal Realty, LLC, our state's highest court issued an important decision impacting all landlords and tenants who participate in the "Section 8" Program.
For over three decades, Sonia Rosario has lived in a New York City rent-stabilized apartment and, for a good chunk of that time, has received benefits from the Tenant Based Assistance: Housing Choice Voucher Program, commonly known as “Section 8.” In February 2003, Rosario’s landlord, Diagonal Realty, LLC, informed her that it would no longer accept Section 8 payments. When Rosario did not tender the full rent herself, Diagonal commenced a non-payment proceeding in the New York County Civil Court. Rosario then brought suit in New York County Supreme Court seeking a declaration that Diagonal could not “opt out” of the Section 8 Program. The Supreme Court agreed and granted summary judgment in Rosario’s favor; an outcome which was affirmed by the Appellate Division, First Department, and the New York State Court of Appeals. New York’s Rent Stabilization Code is a regulatory scheme that affords tenants an array of protections. One such protection is that landlords are required to provide renewal leases to these tenants "on the same terms and conditions as the expired lease, except where the owner can demonstrate that the change is necessary in order to comply with a specific requirement of law ....” The state’s highest court concluded that the acceptance of payments made by the Section 8 Program is a “term and condition” of the parties' lease. Thus, a landlord who has accepted Section 8 payments on behalf of a rent-stabilized tenant may not later refuse to do so. Diagonal argued that it was not required to continue accepting Section 8 payments due to a change in federal regulations allowing landlords to terminate participation in the program “without cause” upon the expiration of the lease. This new regulation, Diagonal contended, preempted the state’s Rent Stabilization Code. The Court of Appeals rejected that interpretation and was of the opinion that Congress intended to allow state protections to remain in place when federal protections for Section 8 tenants were repealed. Thus, while “free-market” Section 8 tenancies may end upon the expiration of a lease term, rent-regulated Section 8 participants remain "untouchable." For a copy of the Court of Appeals's decision, please use this link: Rosario v. Diagonal Realty, LLC
 In Matter of Kern v. Guller, Morris Guller had filed an eviction proceeding against his tenant, Henry Kern, and was awarded a judgment of possession and a warrant of eviction but judgment on the amount of unpaid rent was reserved so that Kern could provide the court with proof of payment.
On appeal to the County Court of Greene County, Kern secured a stay of execution of the warrant of eviction. However, because he failed to submit proof of payment, the Justice Court issued a judgment awarding Guller $4,800 in unpaid rent. The County Court affirmed that judgment and reinstated the warrant of eviction. On appeal, the Appellate Division, Third Department, again affirmed. Interestingly, even though Guller’s pleadings proffered inconsistent theories -- alleging both the nonpayment of rent and holding over after the expiration of the tenancy's term -- the AD3 concluded that the Justice Court retained jurisdiction to entertain the case and properly granted relief in Guller’s favor. To win a holdover case, a landlord must establish that a tenant remains in possession of space after the tenancy’s termination (without the owner's consent). In this instance, the court found that Kern’s month-to-month tenancy was properly terminated by Guller’s oral and written notices. While the AD3 was of the opinion that inconsistent causes of action may be alternatively pled in a summary proceeding, that holding is at odds with a number of cases which have expressed disapproval of the practice.* If nothing else, the inconsistency is consistent.
For a copy of the Appellate Division's decision, please use this link: Matter of Kern v. Guller ---------------------------- * See, e.g., Dean v. Korkidis, N.Y.L.J., 12/5/91, p. 29, col. 3 (App. Term, 9th and 10th Jud. Dists.) ("This court disapproves of the practice of combining two such inconsistent theories in one proceeding. Since a nonpayment proceeding commenced after a Notice of Termination can vitiate said notice, this court is unable to discern with sufficient clarity, what the underlying nature of this proceeding is meant to be. Such 'hybrid' pleadings are not to be encouraged or otherwise endorsed as valid pleadings."); Harte v. Cornacchia, N.Y.L.J., 10/4/91, p. 25, col. 6 (App.Term, 9th and 10th Jud.Dists.) ("The landlord commenced a combined holdover and a nonpayment proceeding against tenant. Under the circumstances, the landlord's commencement of the nonpayment proceeding was inconsistent with the landlord's claim that the tenant was holding over.")
 Did you catch the Appellate Term's decision in 701 Empire Blvd., LLC v. Sweet?
You're certain to like it, particularly if you despise attorneys. In that case, the tenant retained counsel to vacate a judgment of possession and warrant of eviction that had issued against her on default. Although the tenant had a breach of warranty of habitability defense (as a result of certain violations) and alleged that she had not been served with either the demand of the rent or any of the pleadings in the case, the tenant's attorney settled the dispute by stipulating that the tenant would pay some $10,148.60 in about 40 days, together with such prospective rent that would become due and payable. When the tenant later learned what happened, she retained another attorney and alleged that her prior counsel had entered into the agreement "without her knowledge and consent." She also objected to a $4,000 error in the amount of rent claimed to be due and to the lack of any repair obligations on the landlord's behalf. After the Kings County Civil Court refused to set aside that agreement, the Appellate Term, 2nd and 11th Judicial Districts, intervened and reversed. The appellate court noted that while an attorney may usually make "procedural or tactical decisions" on a client's behalf, counsel is not permitted to "compromise or settle a claim" without the client's approval. Absent that authority, any agreement reached may not be binding. When entering into a settlement, how does a third-party know that the adversary's attorney may rightfully take such action? Without the litigant's active participation in the process, you really don't. And, according to the AT's decision, it isn't prudent to blindly accept an adversary's representation that they are acting with authority. In fact, you do so at your own peril. In this instance, the AT was of the opinion that the tenant was denied an opportunity to consult with her attorney before the stipulation was reached, that she only learned of the disposition of her case after the agreement had been signed in her absence, and, that she never ratified the agreement by "words or conduct." As a result, the settlement was annulled and the case remanded for a decision on the tenant's motion to vacate her default. A bittersweet outcome for the landlord, that's for sure. For a copy of the Appellate Term's decision, please use this link: 701 Empire Blvd., LLC v. Sweet
 If a recipient contests receipt of legal papers alleged to have served on them, you better be prepared to present testimony as to your efforts to effect service, or your case will be dismissed.
In Forty Central Park South v. Kiss, the tenant denied receipt of the pleadings in a summary proceeding. After the court held a "traverse" -- a hearing to determine whether or not the recipient was properly served with the papers in question -- a Housing Court Judge of the New York County Civil Court dismissed the case. Apparently, the judge believed the tenant's testimony that she had not received copies of the Notice of Petition and Petition by mail. And, for some undisclosed reason, the landlord's attorney failed to produce a witness -- or other evidence, like mailing receipts -- which would have established that the papers had been mailed to the tenant as statutorily required. Faced with that record, the Appellate Term, First Department, affirmed the dismissal on appeal. We're sure there were no smooches for the landlord's attorney after that outcome. But was it the kiss of death? For a copy of the Appellate Term's decision, please use this link: Forty Central Park South v. Kiss
 Settlement agreements -- or "stipulations" -- reached within the context of litigation are typically viewed as preferred dispute resolution mechanisms, and will not be cast aside absent some significant misunderstanding or irregularity.
If you think you've got at an agreement with someone, it's best to get that understanding documented in a final written form as soon as possible, and not leave any important elements or aspects of the arrangement "open" or unresolved, since problems are likely to ensue. By way of example, in Split Rock Developers, LLC v. Zartab, Inc., a tenant ended its subtenant's lease based on the occupant's failure to pay rent for the months of October, November and December 2004. Although the parties had entered into a "so-ordered preliminary stipulation" which provided that the subtenant would vacate the space and pay $5,800 upon execution of a more formalized agreement, when the time came to execute that formal document, the subtenant refused to do so. When tenant moved the Nassau County District Court to compel the subtenant to perform as originally represented, the District Court vacated the underlying settlement agreement based on "mutual mistake" and directed the parties to proceed to trial on the underlying dispute. On appeal, the Appellate Term, 9th and 10th Judicial Districts, modified the outcome by reinstating the "preliminary agreement" and suggested that the parties could duke out the agreement's enforcement in another forum (like the local Supreme Court). In its decision, the AT noted as follows: In our view, the relief sought of compelling tenant to execute the more formal stipulation and the releases is equitable and injunctive in nature, and thus beyond the jurisdiction of the District Court to grant ... Therefore, we sustain the court's denial of landlord's motion to enforce the stipulation on the ground that the court lacked the jurisdiction to grant the relief sought. In so holding, we do not pass on the ultimate issue of whether the so-ordered stipulation is enforceable. We note, however, that, generally, when a contract does not specify a time of performance, a reasonable time is implied ....
That last sentence piqued our curiosity. If the appellate court had been disinterested in passing upon the agreement's enforceability, then why did it offer a comment on a party's "reasonable time" performance requirement? And, if the agreement was unenforceable, why would the appellate court bother reinstating it? (Not to split rock hairs, but this wouldn't be another instance of our courts elevating forum over substance?) For a copy of the Appellate Term's decision, please use this link: Split Rock Developers, LLC v. Zartab, Inc.
 In Riverside Syndicate, Inc. v Saltzman, the Appellate Term, First Department, examined the consequences of a landlord's failure to timely file affidavits of service for a number of summary holdover proceedings initiated in the New York County Civil Court.
On motion by the tenants, the Civil Court dismissed the landlord's cases because of a single-day delay in getting the papers to the court. A state law [New York Real Property Actions and Proceedings Law section 735(2)] expressly provides that proof of service of pleadings in a summary proceeding "shall be filed with the court or clerk thereof within three days after" personal delivery to the tenant or after completion of all mailings when service has been otherwise effected. However, the statute is conspicuously silent as to the consequences of a landlord's failure to timely file these papers. Another state law [CPLR 2004] provides that "the time fixed by any statute, rule or order" may be extended upon a showing of "good cause," which can include an attorney's inadvertent error or "law office failure." Despite that clear and unambiguous language, the Appellate Term, First Department, reversed the dismissals in the "absence of any discernible prejudice to the tenants." (What happened to the demonstration of "good cause" by the "defaulting" party? Why do the tenants have to show "prejudice," when it is the landlord who has failed to adhere with the requirements of statute?) Go ahead. Try to 'splain it! We dare you! For a copy of the Appellate Term's decision, please use this link: Riverside Syndicate, Inc. v Saltzman
 Diamonds are reported to be the hardest minerals known to humankind. On the "Mohs' scale of mineral hardness," here's how diamonds rate (with a 10 being the highest rank on the scale):
Talc Gypsum Calcite Fluorite Apatite Orthoclase Feldspar Quartz Topaz Corundum Diamond
In West 45th Partners, LLC v. Moneta Diamonds, Inc., Moneta Diamonds met considerable resistance when it attempted to vacate a stipulation of settlement or to excuse its nonperformance of the terms of the parties' agreement. (Like any contract, these documents are usually enforced in accordance with their terms, particularly in the absence of any vagueness, ambiguity, or other significant irregularity.) In this instance, Moneta Diamonds reportedly failed to honor certain "time of the essence" payment provisions. Since the tenant had been represented by counsel when it acquiesced to these "unambiguous" terms, the Appellate Term, First Department, viewed the agreement as rock solid and was concrete in its resolve that, absent a good explanation for the default, an eviction could ensue. Undeniably, this particular settlement agreement didn't prove to be Moneta Diamonds's best friend. (How does that old song go?) For a copy of the Appellate Term's decision, please use this link: West 45th Partners, LLC v. Moneta Diamonds, Inc. --------------------------- To view our other blog posts on this topic, please use this link: Stipulations
 When a Manhattan fencing center failed to pay its rent, the building's landlord filed a summary nonpayment proceeding to collect the sums due.
In its defense, the center counter-attacked with the argument that the landlord had violated the law by leasing the space to the tenant without a certificate of occupancy (or c/o).* Both the New York County Civil Court, and the Appellate Term, First Department, did not respond favorably to this parry. Since this commercial tenant had agreed to accept the premises in "as is" condition, and there were no representations or warranties made by the owner that it would secure a c/o for the tenant (or otherwise legalize the space for the tenant's use), the landlord was awarded a money judgment for a whopping $237,965.39 in rent. Salut! For a copy of the Appellate Term's decision, please use this link: 114 W. 26th St. Assoc., L.P. v. Metropolis Fencing Sports Ctr. LLC -------------------------- *A c/o is a document issued by local government agency which certifies that the structure complies with local codes and ordinances and that the building may be utilized for the designated purpose(s).
 Even when things look pretty bleak for a tenant, and an eviction is imminent, a court retains the power to vacate the warrant and can allow the tenant to remain in possession of commercial or residential space for "good cause shown." [RPAPL section 749(3)]
In Mack-Cali So. W. Realty Assoc., LLC v. Benni's I, LLC, the tenant, Benni's I, LLC (doing business as "Bennigan's"), conceded that it owed its landlord $126,224.59 in rent for the period February 14, 2003 through July 6, 2005, and signed a stipulation of settlement outlining the payment terms. Months later, as a result of Benni's failure to comply with the agreement's terms, the City Court of Yonkers (Westchester County) awarded the landlord a money judgment for all unpaid rent in the amount of $183,719.77, granted a final judgment of possession and issued a warrant of eviction as against the tenant. Benni's later moved by Order to Show Cause to stay the eviction and vacate the court's determination alleging that the judgment incorrectly included "disputed taxes." Upon signing of the stay request, the court directed the tenant to deposit $60,000 into court. After a subsequently scheduled hearing, the court denied the tenant's motion, ordered the release of the $60,000 to the landlord, and stayed the eviction for an additional 14 days. Within that two week period, tenant remitted the balance of the judgment amount ($123,969.77) and again asked the court to vacate the final judgment of possession and warrant of eviction based upon the tenant's full and complete payment of all sums which had been found to be due. Although the landlord objected to the request, the court granted relief in the tenant's favor, finding "good cause" to reinstate the tenancy. On appeal, the Appellate Term, 9th and 10th Judicial Districts, concurred with the District Court, noting as follows: In our view, the court could properly determine that good cause existed to vacate the warrant (RPAPL 749 (3)). "The law abhors a forfeiture of a lease ...." Here, the court found that tenant had paid the judgment in full. In addition, tenant has allegedly paid more than $2.5 million in rent over the four years of its tenancy, employs more than thirty people, who would be harmed by execution of the warrant, and stands to lose a long-term lease and its investment in the premises. Although full payment of a judgment is not grounds to vacate the judgment, in these circumstances it was not an abuse of discretion for the court to vacate the nonpayment warrant in order to prevent a forfeiture of the leasehold ....
So, for now, it looks like we can still all get together at Bennigan's. For a copy of the Appellate Term's decision, please use this link: Mack-Cali So. W. Realty Assoc., LLC v. Benni's I, LLC
In 15th Assoc. LLC v. Pamblanco, the landlord -- 15th Associates, LLC -- won a summary holdover proceeding that it had filed against its tenant. While an appeal of the case was pending, the tenant died. Rather than issue a substantive decision on the merits, the Appellate Term, First Department, opted to dismiss the appeal without prejudice. The court cited a "lack of jurisdiction" to entertain the matter upon the death of a party. Here's what the AT1 wrote: The death of a party divests the court of jurisdiction and stays the proceedings until a proper substitution has been made pursuant to CPLR 1015(a). In the absence of a substitution of a representative for the estate of the (now) deceased tenant-appellant, this court is without jurisdiction to hear and decide the appeal ....
We don't understand why the court felt compelled to use the words "lack of jurisdiction" and why it opted to dismiss the appeal. Here's what CPLR 1015(a) provides: Substitution upon death. (a) Generally. If a party dies and the claim for or against him is not thereby extinguished the court shall order substitution of the proper parties.
Where in that statutory language does it say the court is divested of "jurisdiction" upon a litigant's death? And, why did the court refuse to stay the appeal so as to allow for an appropriate substitution (by an estate representative)? We're dying to figure this one out! For a copy of the Appellate Term's decision, please use this link: 15th Assoc. LLC v. Pamblanco
 There are a series of steps a landlord must take before starting a rent nonpayment case.
The first hurdle is to make a demand of the rent upon the tenant. While this demand may be made "in person" (orally) or "in writing," even this relatively simple predicate is governed by a number of procedural and technical requirements. Among other things, this demand must clearly inform the tenant of the approximate good-faith sum sought to be recovered and the encompassed time frame. For example, requests for "all back rent" -- without further elaboration or delineation -- are insufficient to support a case. Similarly, "lumping" -- offering a total dollar amount, without providing a breakdown or other substantiation for the calculation -- is also discouraged. Of course, by making this demand, a landlord is acknowledging the ongoing nature of the landlord-tenant relationship and is seeking to recover such sums due pursuant to the parties' lease for the commercial or residential space. The last thing a landlord wants to do is to muck up the case with inconsistent theories for recovering possession. For example, in Bank of New York. v. Kaplan, the landlord's pleadings alleged, on the one hand, a claim for the unpaid rent (pursuant to a renewal), yet alternatively asserted that the lease agreement had expired (and the tenancy terminated). This is how the court framed the issue: [T]the petition demands rent based on Petitioners's [sic] deeming the lease renewed by using their appraisal report. See Petition ¶¶23 & 24. However, alternatively, Petitioners seek possession upon termination of the lease based on Respondent's failure to properly renew the lease. See Petition ¶31. Respondent, therefore, seeks dismissal on the basis of inconsistent theories. A petition cannot be based on alternative inconsistent theories .... The petition seeks rent which by that legal term acknowledges there is a tenancy pursuant to an agreement. Therefore, the payment of the demanded rent satisfies the petition and the tenancy continues. However, the petition seeking possession by that legal term there is no relationship and therefore the occupancy terminates upon a judgment of possession. Consequently, this petition which seeks both rents and termination is inconsistent and defective. Therefore, the motion for summary judgment is granted.
Sometimes, my friends, it's best to keep things simple. The landlord should have opted for either a nonpayment or a holdover proceeding. (And, in the event neither neatly fit into the landlord's theory of recovery, an action for declaratory judgment -- filed with the county Supreme Court -- would have likely been the ideal way to go.) Hedging bets may work for gamblers, but in New York's landlord-tenant court, that kind of strategy could get your case booted. "Bank on it!"For a copy of the Housing Court's decision, please use this link: Bank of New York. v. Kaplan
 North Main St. Bagels (NMSB), located out in Easthampton, New York, closed its doors back in October 1997, but didn't surrender its space since it was in the midst of negotiating a sale of the business.
Even though it was no longer actively operating, NMSB left its equipment in its space, maintained electrical service, and continued to pay its rent. Landlords Robert and Shirley Duncan -- dissatisfied with the status quo -- entered the premises, "illegally" evicted the tenant, and relet the space to another. Although the landlords had been found guilty of a trespass and wrongful eviction, the Suffolk County Supreme Court awarded the tenant nominal damages — a single, solitary dollar — for the inconvenience and damage suffered. On appeal, the Appellate Division, Second Department, disagreed with the outcome and awarded the tenant $30,000, together with prejudgment interest from the date of the wrongful eviction. The appellate court explained that in this kind of case, “[t]he measure of compensatory damages for wrongful eviction is the value of the unexpired term of the lease over and above the rent the lessee must pay under its terms together with any actual damages flowing directly from the wrongful eviction including lost profits and a loss of personal property.” Since the "replacement lease" was at the same rent which NMSB had paid to its landlords, no compensatory damages were owed for the value of the unexpired term. However, the court found that the tenant was entitled to compensation for the loss of its personalty. NMSB introduced testimony that its equipment was valued at approximately $30,000, after depreciation. Since that testimony went unrebutted at trial, the appellate court concluded that $30,000 more appropriately compensated for the loss. . "That's some bite!"For a copy of the Appellate Division’s decision, please use the following link: North Main St. Bagel Corp. v Duncan II For a copy of the Appellate Division's earlier decision in this case, please use the following link: North Main St. Bagel Corp. v Duncan I
In Forty Central Park South v. Wadud -- a nonpayment case -- the New York City Civil Court refused to vacate a warrant of eviction or to relieve a tenant of the consequences of his non-compliance with a “so ordered” stipulation of settlement. On appeal, Appellate Term, First Department, affirmed. When parties to a summary proceeding wish to amicably resolve all or some of the issues in a dispute, they enter into an agreement known as a stipulation. The majority of these documents are handwritten on forms available in most courtrooms and are “so ordered” by the presiding judge or judicial hearing officer. In nonpayment cases, these agreements will minimally contain a breakdown of the rent due, list a payment schedule, provide a timetable for any repair obligations, and, will reserve remedies (such as the tenant's eviction) in the event of a party’s breach or default. Viewed as efficient dispute resolution mechanisms, these agreements are stringently enforced (in the absence of some substantial irregularity). Fraud, collusion, or mistake are commonly cited as reasons for annulling the arrangement, but the party seeking to be relieved of the contract's terms has the burden of establishing the existence of one or more of these grounds. As Wadud reinforces, courts will typically avoid recrafting an agreement’s terms “based upon the principle that the parties to a civil dispute are free to chart their own litigation course.” So, chart carefully. For a copy of the Appellate Term’s decision in Forty Central Park South v. Wadud, please use the following link: http://www.nycourts.gov/reporter/3dseries/2007/2007_50281.htm
While precision and exactitude should be the goal in landlord-tenant proceedings, the reality is that mistakes happen. (In fact, if you really think about, the latter tend to abound.) More often than not, judges will forgive inconsequential errors or omissions made by litigants or their counsel and will usually allow court papers to be amended to correct errors or deficiencies. Many correctly believe there is little point to elevating form over substance, particularly if a case can be started anew days or weeks later.* Yet, if certain members of the New York State Assembly have their way, the flexibility courts have to allow amendments may be constrained considerably, particularly when it comes to nonpayment cases. (But first, allow us to give you a little context.) Under existing caselaw, a demand of the rent need only cite an "approximate good faith sum.” Exactitude is usually not required.** However, a proposed bill (A5120) would bring any malleability to an end. Here's what the law would provide: FALSE NON-PAYMENT OF RENT CLAIMS. IF THE COURT FINDS THAT THE AMOUNT REQUESTED BY THE PETITIONER IS GREATER THAN THE AMOUNT DUE, IN ACCORDANCE WITH A PREVIOUS AGREEMENT BETWEEN THE PETITIONER AND THE RESPONDENT CONCERNING RENT PAYMENTS, THE COURT SHALL FINE THE PETITIONER ONE HUNDRED DOLLARS AND DISMISS THE PROCEEDINGS.
We believe that the language of this law is completely unworkable and will foster needless expense and delay that would be harmful to both landlords and tenants. What is a “false" nonpayment claim? (Beats us! The term is not defined.) Will the law encompass only “intentional” misrepresentations as to the sums sought to be recovered? (It does not currently provide that carve-out.) And, pray tell, how does one go about proving a landlord intentionally sought to collect monies it knowingly believed it wasn’t entitled to? (We think it is highly unlikely that landlords will ever concede, in open court or in a sworn affidavit, that cases were brought to collect sums that they did not think were due or payable.) What of miscalculations or innocent errors? If a litigant’s rent demand is off by a nickel, does that trigger the statute's penalties and “poison” an entire case? And, what of any balance rightfully due to the landlord? Should a monetary penalty be imposed and an entire case dismissed, simply because a landlord sought a nickel more than what s/he was ultimately entitled to collect? Obviously, A5120 is an unworkable piece of legislation. We are hopeful that rational minds will prevail and that the bill never sees the light of day. To download the entire text of the proposed legislation, please use the following link: http://assembly.state.ny.us/leg/?bn=A05120&sh=t
---------------------------- * Without some demonstrable prejudice, we do not see how public policy or judicial economy is furthered by denying litigants the opportunity to have disputes heard on the merits. Cases should not “won” or “lost” on the basis of some typo or other ministerial error. ** See, e.g., Kerman Equities v. Swett, N.Y.L.J., 2/7/96, p. 29, col. 1 (App.Term, 2nd and 11th Judicial Districts) ("A three-day notice demanding payment of rent must inform the tenant of the particular period for which rent is due and the approximate sum of rent owed for that period ....").
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